I am a senior editor at Forbes and focus mainly on the business of sports and our annual franchise valuations. I also spend a lot of my time digging into what athletes earn on and off the field of play. I've profiled a bunch of athletes that go by one name: LeBron, Shaq, Danica and others. I also head up our biennial B-School rankings, our list of America's Best Small Companies and our annual features on the Best Places for Business (metros, states and countries). I joined Forbes in 1998 after working 3 years at Financial World magazine.

Yankees Soar, Mets Plunge On List of Baseball's Most Valuable Teams

The average MLB franchise is now worth $523 million, an all-time high and 7% more than last year. All of the league’s teams rose in value except for three: the New York Mets, San Diego Padres and Cleveland Indians. The increase in team values is the result of greater revenue for teams playing in new stadiums, like the New York Yankees (up 6% in value to $1.7 billion) and Minnesota Twins (up 21% to $490 million) as well as the Florida Marlins (up 13% to $360 million), who are scheduled to move into their new stadium in 2012.

The Yankees are baseball’s most valuable team for the 14th straight year (since Forbes began valuing franchises in 1998). The gap between the Yankees and No. 2 Baltimore in 1998 was 12%. Today the Yankees are 86% more valuable than No. 2 Boston.

Yankee Global Enterprises is a three-engine money-making machine. The baseball team generated $325 million in revenue from regular-season tickets and luxury suites in 2010. Sponsorship revenue at the stadium is $85 million annually thanks to deals with PepsiCo, Bank of America, MasterCard, Delta Air Lines and others.

The YES Network, the team’s 34%-owned regional sports channel, is the most profitable RSN in the country and had over $400 million in revenue last year. The Yankees own a stake in Legends Hospitality Management, which manages stadiums, and generates $25 million in operating income. The enterprise value for the Yankees, YES and Legends is $5.1 billion.

Another big winner was the Texas Rangers (up 25%, to $561 million). Ray Davis and Bob Simpson bought the team, the lease to Rangers Ballpark in Arlington and some nearby real estate from Tom Hicks in a bankruptcy court auction for $593 million in July. Not only are the Rangers, which needed assistance from MLB to meet payroll last season, much better capitalized (the new owners infused the team with $225 million of equity), the team also has a new, richer cable deal. It signed a 20-year TV deal with Fox Sports Southwest that is expected to pay more than $1.5 billion over the life of the contract. The afterglow of the team’s first World Series appearance in October will also boost sponsorship and ticket revenues this year.

A year ago baseball teams were still fretting about the recession and what it might mean for attendance. Yet 73 million fans showed up at the ballpark last summer, which was the sixth highest total of all-time and down just 0.4% from 2009. Twenty teams drew at least 2 million fans, while nine teams topped the 3 million mark, led by the Yankees at 3.8 million. An overall improvement in the economy and better lending conditions boosted the average multiple of revenues that teams are valued at slightly to 2.5.

Overall, revenue for baseball’s 30 teams increased 4%, to $6.1 billion. Total operating income (earnings before interest, taxes, depreciation and amortization) fell 5%, to $494 million as rising stadium (rent and operating costs) and team (marketing and player development) expenses ate into profits.

The most profitable team was the Padres, which had an operating income of $37 million in 2010. The team’s attendance surged by 200,000 at Petco Park as the Padres finished just two games behind the San Francisco Giants in the National League West. The Padres managed to post a 90-72 record despite a payroll of just $38 million, which was the lowest in baseball. The Padres also benefited from a revenue-sharing check of more than $30 million.

Thanks to more than $400 million sent from high-revenue to low-revenue teams, several teams with low attendance were able to post operating profits of at least $10 million. Among them: the Pittsburgh Pirates ($25 million), Kansas City Royals ($10 million), Oakland Athletics ($23 million) and Marlins ($20 million).

Only three teams had a negative operating income in 2010: the Detroit Tigers (-$29 million), Mets (-$6 million) and Boston Red Sox (-$1 million), which collectively spent $475 million on players (including benefits and bonuses). Each ranked among the top six biggest spenders last year, but the Mets and Red Sox own stakes in regional sports networks, which offset any losses on the diamond.

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The PILOT bonds are a liability but it is nonrecourse debt so we excluded the PILOT debt this year for the Mets and Yankees which accounts for the big drop in debt/value. The Yankees’ revenues are net of the annual PILOT payment and their revenue sharing obligation.

Thanks for the reply…was curious why the 2009 figure was so high, and think your decision to treat PILOTs differently in 2010 makes perfect sense.

Are you at liberty to disclose the Yankees and Mets annual PILOT payments? Also, I assume that the Yankees and Mets needs to be normalized between 2009 and 2010 because of the decision to net the PILOTs. Do you know what their 2009 numbers would have been if PILOTs were treated similarly for that survey?

Our operating income figures are EBITDA which can be very different than EBIT for baseball teams. Rangers had $19 million in depreciation & amortization charges in 2009. Mariners recently had $16 million.

Just to clarify…seeing “operating income” of $XX for a given team immediately told me that gross cash flow, EBITDA, etc. would be a fairly significant amount higher than that…until I read the footnote.

Forbes traditionally has used operating income as a synonym for EBITDA despite the GAAP definition of operating income. In the first reference in any story to op. inc. we usually make clear that we are referring to EBITDA and not EBIT.